U.S. Treasurer Being Investigated On Payments From Ex-Employer

By DAVID JOHNSTON,

Published: October 30, 1992

WASHINGTON, Oct. 29—
Federal agents are looking into accusations that the United States Treasurer received payments from a former employer while in office, Administration officials said tonight.

Treasury Department officials said the Treasurer, Catalina V. Villalpando, whose name appears on United States currency, was placed on an indefinite leave today.

Federal agents, who set out on a series of searches on Wednesday, retrieved documents from the Atlanta offices of a company that had employed her, the Administration officials said. The investigators also searched a storage locker here as well as several residential addresses in the District of Columbia and a residence in suburban Virginia. Substantial Amount of Money

Mrs. Villalpando, who was appointed to the largely ceremonial post by President Bush in 1989, could not be reached for comment. Investigators said she was also under scrutiny for making false statements to a Federal agent about what they called a substantial amount of money. It is a felony for a senior Federal official to accept compensation or benefits from a former employer while working for the Government.

Before being named Treasurer, Mrs. Villalpando was a partner at Communications International Inc., a public relations concern here. Before that she was a vice president for the Mid-South Oil Company. Administration officials declined to say whether the accusations involved either of the two companies.

But tonight, WSB-TV, the ABC affiliate in Atlanta, reported that F.B.I. agents had taken a large quantity of documents from the office of Communications International in the Atlanta suburb of Norcross. Company officials could not be reached for comment.

The station quoted a company employee as saying that the company officials were witnesses in, not subjects of, the investigation. The station also reported that investigators were examining whether Government officials had been involved in helping steer Government contracts to the company. Communications International helped set up the telephone communications system for allied soldiers in the Persian Gulf war.

Claire E. Buchan, a spokesman for the Treasury Department, would not comment on the investigation. "We are aware of the situation but we don't comment on investigations," she said, adding that Mrs. Villalpando had asked for and had been granted administrative leave to "deal with her personal situation."

Disclosure of the inquiry comes at a time when Bush campaign officials are already angry over an undercover sting operation by the Federal Bureau of Investigation involving the chairman of the Bush-Quayle campaign in Texas. This inquiry, involving another Republican figure, seemed likely to further strain relations between the White House and William S. Sessions, the F.B.I. Director.

Federal law-enforcement officials said the case originated with the Public Integrity section of the Justice Department, which investigates accusations of official corruption. That means the F.B.I. is operating under the close supervision of Federal prosecutors from the Justice Department's headquarters.

The Administration officials said the searches had been conducted without regard to the effect on the Presidential election on Tuesday and had been carried out at a point in the investigation when agents could proceed no further without looking for records and documents. Largely Ceremonial Post

The Treasurer, one of the oldest offices in Washington, was established in 1777. Originally charged with receiving and holding Government money, its functions have been largely taken over by other agencies. However, it still supervises the offices of the Bureau of Engraving and Printing, the Savings Bond Division and the Mint.

Mrs. Villalpando, one of the highest ranking Hispanic women in the Administration, worked in the White House personnel office and as a liaison to Republican voting groups in the Reagan Administration.

At the Republican National Convention in Houston, Mrs. Villalpando visited the New Jersey delegation and linked Mr. Clinton to Henry Cisneros, the former Mayor of San Antonio, who withdrew from public office three years ago after acknowledging that he had an extramarital affair.

"Can you imagine two skirt chasers campaigning together?" she said of the two men. Some members of the delegation reacted positively to her remarks. But former Gov. Thomas Kean said the comments were "totally unnecessary."

Mrs. Villalpando has proudly described her hardscrabble upbringing as a positive influence in her life. "My dad was always very strict with me," she once told an interviewer. "He always forced me to go to church. We were so poor -- I have three sisters and two brothers -- we were all sent out to work very early. It was very good discipline."